A New Era of Estate Planning for Same-sex Couples Post Windsor and Hollingsworth

8/22/2019 A New Era of Estate Planning for Same-sex Couples Post Windsor and Hollingsworth

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state Planning for Oregon and SW Washington

By Richard B. Schneider, Estate Planning Attorney


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Members of the LGBT

community, as well as those

who support them, have been

fighting for equality in a

number of areas of the law for

decades. One area in particular

which has both personal and

legal implications for same-sex

couples is the right to legallymarry.

Two cases recently decided by the Supreme Court of the United

States, or SCOTUS, will likely go down in the history books as

paving the way for legalizing same-sex marriage across the

United States. Although neither case went so far as toaccomplish that goal yet, the rulings handed down in both have

powerful implications for same-sex couples in the area of estate

planning for now.


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Same-Sex Marriage in the

United States Prior to Windsor

and HollingsworthMarriage laws in the United States are determined by the

individual states. Until several decades ago, the concept of

same-sex marriage was not something that was even

considered by any of the states. During the 1980s and 1990s,

however, several countries legalized same-sex marriage. A few

states in the United States also began to visit the issue. The U.S.

federal government chimed in on the issue by passing the

Defense of Marriage Act, or DOMA, in 1996. DOMA

accomplished two important things.

First, it gave states the right to refuse to recognize a same-sex

marriage that was legally entered into in another state. Second,

it defined marriage for federal benefits as between one man

and one woman.

DOMA was a significant blow for the same-sex marriage

movement because it effectively cut off over 1,000 federal

benefits for legally married same-sex couples. Despite DOMA,

states continued to introduce, and pass, legislation legalizing

same-sex marriage or other similar unions. As of 2013, 13 states

Estate taxes were ju

the tip of the iceberg

the long list of area

where same-sex

couples suffered asresult of DOMAs

definition of marria

With the SCOTUS

decisions, however

same-sex couples ca

now enjoy those fede

benefits just as theheterosexual

counterparts do.


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and the District of Columbia allow same-sex marriage with an

additional four states allowing a civil union or domestic

partnership for same-sex couples. Such was the legal landscape

in the United States when U.S. v. Windsorand Hollingsworth v.Perrycame before SCOTUS.

What Were the Legal Issues in

Windsor and Hollingsworth?

Interestingly, Windsor was based on an estate planning issue.

Edith Windsors spouse and partner of 44 years, Thea Spyer,

died in 2009 leaving her a fairly large estate. The two were

legally married in 2007 in Canadaa marriage that was

recognized by the State of New York where they lived at the

time of Spyers death.

Windsor attempted to claim the unlimited marital deduction to

avoid paying gift and estate taxes on the inheritance; however,

because of the definition of marriage in DOMA, the I.R.S.

refused to recognize the marriage and levied a $363,053 tax on

the gift. Windsor challenged the I.R.S. ruling on the grounds

that the DOMA definition of marriage violates the U.S.

Constitution. Both lower courts that heard the case sided with

Windsor. The case was appealed all the way to SCOTUS.

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Hollingsworth was based on legislation proposed by the State of

California that would amend the state constitutionto include aDOMA definition of marriage, thereby preventing same-sex

marriage in the state. Known as Proposition 8, the proposedamendment was challenged by proponents of same-sex

marriage on the basis that it violates the U.S. Constitution. As

was the case in Windsor, the lower courts agreed with the

challengers and the case landed in front of SCOTUS for a

decision. As a side note, it is important to understand that as

part of the U.S. judicial system, states have a significant amount

of sovereignty, meaning they can make many of their own laws;

however, no law may violate the U.S. Constitution.

What Did Windsor and

Hollingsworth Change?In the Windsor case, SCOTUS affirmed the lower court decision,

meaning they agreed that the definition of marriage found in

DOMA violates the principal of equal protection found in the

U.S. Constitution. Therefore, the definition of marriage found in

DOMA can no longer be used to determine eligibility for federal

benefits of any kind.

In the Hollingsworth case it was not actually the State of

California that appealed the lower court ruling but proponents

of Proposition 8 instead. Because SCOTUS decided that standing

If a member of the

LGBT community fa

to properly plan, th

result can be

devastating to his or

partner and family

Having no estate pla

or relying upon a W

Joint Tenancy, or

Tenancy in Common

an estate plan, is

tantamount to giving

control of ones esta

and management o

ones well-being in

times of incapacity


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was lacking, the case reverts back to the last courts decision. In

this case, that means that Proposition 8 is dead because the

Ninth Circuit Court of Appeals ruled that way.

What Did SCOTUS Not Address

in Windsor and Hollingsworth?

Though these rulings are certainly historical, it is crucial to

understand the breadth of the decisions. Put another way, it is

important to know what SCOTUS did not decide in Windsor and

Hollingsworth as well as what they did decide.

In Windsor, SCOTUS did not legalize same-sex marriage across

the United States. Instead, the Court left it to the individual

states to decide whether they will permit same-sex marriage. In

addition, SCOTUS did not address the provision in DOMA that

allows a state to refuse to recognize an out of state marriage.

Therefore, states are still able to decide if they will, or will not,

honor same-sex marriages entered into in another state.

In Hollingsworth, SCOTUS did not consider the actual facts of

the case, meaning that the Court did not answer the question

of whether Proposition 8 violates the U.S. Constitution or not.

Though the Ninth Circuit answered that question in the

affirmative, that decision does not hold the same weight as a

SCOTUS ruling.

With the death of

DOMA, estate plan

should be reviewed a

revised accordingly


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How Do the Decisions in

Windsor and Hollingsworth

Change Estate Planning forSame-Sex Couples?

Many legal analysts believe that the decisions in Windsor and

Hollingsworth will eventually lead to the legalization of same-

sex marriage throughout the United States eventually; however,

that may be years down the road. In the meantime, there are

some important points to take away from these decisions,

particularly in the area of estate planning for same-sex couples.

Experts estimate that over 1,100 federal benefits were denied

to same-sex couples as a result of the DOMA definition of

marriage. Many of thosebenefits have a direct relation to

estate planning. Some ofthe more important benefits that

15 Common Reasons To Do Es

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Living Trusts: Calculating the

Benefits

A Living Trust is a very versatile e

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Free Estate Plannin Re

1. Same-sex marriage remains legal in 13 states plus

the District of Columbia.

2. A state may still refuse to recognize your same-sex

marriage from another state

3. The DOMA definition of marriage is no longer

valid.

4. Federal benefits may no longer be denied to

same-sex couples who are legally married in a

state that allows same-sex marriages.
http://www.rbsllc.com/estate_planning/living-trusts/http://www.rbsllc.com/estate_planning/estate-planning/


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1. Unlimited marital deduction

2. Portability

3. Social Security and Veterans benefits

4. Qualified retirement account beneficiary

designation

5. Roll-over rights for IRAs and qualified retirement

accounts

6. Next-of-kin designation for emergencies

7. Rights to medical and school records for minor

children as well as custody and visitation rights

should now beincorporated into the estateplan oflegally

married same-sex couples include:

Because of the sheer number of benefits that may now be

available, and the fact that each estate plan is as unique as the

individual who creates the plan, be sure to consult with your

estate planning attorney to determine what changes need to be

made to your estate plan post Windsor and Hollingsworth.

SCOTUS Blog,Federalism and the authority of the states to define marriage

National Law Review,Same-Sex Marriage and the Effect of Windsor andHollingsworth Cases on Estate Planning in Michigan

Forbes,How The Supreme Court Decision Will Change Estate Planning For Same-

Sex Spouses

PBS News Hour,15 Federal Benefits Same-Sex Couples Can Now Look Forward To

About the Author

Law Offices of Richard B. Schneid

LLC Estate Planning & Asset

Protection Attorneys Portland O

Before devoting his professiona

efforts exclusively to estate plan

Mr. Schneider spent over fifteen

years working on Wall Street fo

major law firms and investment

banks. After graduating from law

school, he practiced general civ

in New York City for five years,

specializing in business transac

financings and corporate matte

also represented major investm

banking firms in mortgage tradi

and real estate-related matters.

Among his clients were internat

shipping companies, commercia

investment banks and institution

lenders, including General Elec

Capital Corporation, Salomon

Brothers and Merrill L nch.

2455 NW Marshall St, Suite 11

Portland, OR 97210

Phone: (503) 241-1215

Fax: (503) 241-1216

www.rbsllc.com
http://www.scotusblog.com/?p=166404http://www.scotusblog.com/?p=166404http://www.scotusblog.com/?p=166404http://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.pbs.org/newshour/rundown/2013/06/some-federal-benefits-same-sex-couples-can-now-look-forward-to.htmlhttp://www.pbs.org/newshour/rundown/2013/06/some-federal-benefits-same-sex-couples-can-now-look-forward-to.htmlhttp://www.pbs.org/newshour/rundown/2013/06/some-federal-benefits-same-sex-couples-can-now-look-forward-to.htmlhttp://www.rbsllc.com/http://www.rbsllc.com/http://www.rbsllc.com/http://www.rbsllc.com/http://www.pbs.org/newshour/rundown/2013/06/some-federal-benefits-same-sex-couples-can-now-look-forward-to.htmlhttp://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.forbes.com/sites/deborahljacobs/2013/06/26/how-the-supreme-court-decision-will-change-estate-planning-for-same-sex-spouses/http://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.natlawreview.com/article/same-sex-marriage-and-effect-windsor-and-hollingsworth-cases-estate-planning-michigahttp://www.scotusblog.com/?p=166404http://www.rbsllc.com/services/lgbt-community/

Documents

A New Era of Estate Planning for Same-sex Couples Post Windsor and Hollingsworth